Matt Joanou is Co-Founder and CEO, Stakeholder Labs, that is on a mission to connect brand loyalty with equity participation.
Artificial intelligence has started to carve out a place for itself in almost every sector, opening the doors to more advanced processes, deeper insights and improved business models. And as we enter the next round of major earnings calls, AI is already weaving into these critical corporate moments. The role of investor relations will have to evolve to be effective in this rapidly changing environment.
Just last month, Disney’s CEO Bob Iger expressed openness to using AI-driven avatars for earnings calls, while Box CEO Aaron Levie demonstrated AI’s swift aggregation and analysis of earnings information. At that same time, Nvidia, a leading AI developer, is close to becoming the sixth company worth $1 trillion.
In this race to embrace a new technology, it is important that IR (investor relations) teams don’t miss the forest through the trees. AI should be an unlock, making teams more effective and efficient in doing their core roles. With IR, that is connecting more effectively with the investors on their cap table.
So AI has already started inserting itself into IR. But as with many AI-powered products and services, we need to remember a critical component of success: The Human.
By keeping humans in focus throughout this evolution, we can identify the primary hurdle obstructing the full realization of AI’s potential in IR: the lack of trustworthy, real-time shareholder data. The importance of accurate data and the ability to authenticate a real human interaction is top of mind for many AI pioneers, and addressing this challenge is a prerequisite for successfully integrating AI into our society.
Today, when investors purchase stock through their brokerage account, a series of transactions takes place behind the scenes over the course of several days between brokerages, clearinghouses and transfer agents to settle the purchase, which makes identifying a company’s shareholders incredibly opaque. In most cases, publicly traded companies do not have a conclusive or actionable list of their shareholders, and we already have begun to see in other industries the embarrassing consequences of artificial intelligence applied to problems with poor or incomplete data sets.
How AI And Verified Data Could Change Investor Relations
The insights drawn from verified shareholder data can help companies better understand who their investors are, their preferences and their behavior, significantly enhancing communication, interaction and loyalty. In many instances, companies have already gathered large amounts of this information about their customers but have no way of verifying which of their customers are also shareholders. Let’s take a minute to imagine an AI-enabled shareholder experience leveraging verified data:
Personalized Communication: All the investors who have received a startling, anonymous email in all caps from their brokerage asking them to participate in a proxy vote know there has to be a better way. Instead of brokerages sending generic messages, every shareholder could receive messages tailored to their specific relationship with the company. A long-term shareholder should always receive a direct message appreciating their loyalty and a summary of the company’s performance during their hold period, and AI will allow publicly traded companies to execute this important brand moment at scale.
Improved Accessibility And Responsiveness: Internal investor relations teams tend to be very lean and can be overwhelmed with questions and requests from thousands of individual investors. As a result, many IR teams only focus on their largest institutional investors with retail shareholders left to engage with each other on various social platforms. Just think back to the “meme stock” phenomena of not that long ago. Individual investors can be quite powerful when they form digital communities that are engaged with appropriately, and AI could facilitate 24/7, personalized shareholder chatbots, making companies more accessible and responsive to shareholders increasing trust, satisfaction and loyalty.
Proactive Engagement: Many IR departments only communicate directly with their shareholders once a year during proxy season, and proactive engagement is an area where we expect to see a systemic shift in the IR industry. Once shareholders have been verified, companies can use AI to proactively engage investors like a marketer would with content, rewards and experiences intended to increase shareholder loyalty. This could involve providing predictive insights, offering a personalized experience or discounts on the company’s products, or delivering relevant information based on a shareholder’s investment and customer history.
Conclusion
As we venture into 2024, leaders can expect the adoption of AI in investor relations to continue its upward trend, with a clear focus on deepening shareholder engagement. The melding of verified data and AI will provide unprecedented opportunities to transform the communication landscape between companies and their shareholders—both institutional and individuals. The result? Personalized, efficient and proactive communication at scale—a new gold standard for investor relations. I believe this paradigm shift will not only streamline the IR operations but will also add a layer of authenticity to investor relations, fostering a sense of community among shareholders and the companies they invest in. The future of IR is digital, it’s personalized, and it’s exciting. So, as we look to the rest of 2023, expect AI to be an integral part of the new wave of investor relations that is more engaging, transparent and responsive than ever before.
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